Housing Finance: Credit Policies Dictate Private Demand


"Despite their conservatorship status, DeMarco said, the government sponsored enterprises (GSEs) Freddie Mac and Fannie May remain at the center of the country's housing finance system, but that will have to change. The longer the future structure of the system remains uncertain, the more the operational risks of conservatorship will continue to emerge. Improving and simplifying the operations of the GSEs is part of FHFA's duty to preserve and conserve assets and is consistent with the notion of their "wind down," but the ultimate transformation of the GSEs and their market functions will largely depend on actions of Congress and the Administration. This leaves FHFA with the responsibilities of conservatorship while the long term course is determined. "

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